Thursday 20 May 2021

Managing a music business in a pandemic

I am an up beat, can do person. I always have been and I always will be. That's why I run my own business, write my own blog and walk around with a smile on my face most of the time. But the last year has been a challenge. I run a music business and our sector, worth £5.4 billion to the UK in 2019 has taken a kicking beyond belief in the last 14 months. I've been involved with music for 44 years, a long journey, but this is unprecedented.  

Back in 1977, I had a vision. I believed that music could change people's lives. I was only 14 at the time, but I went to The Roundhouse, saw the Ramones and realised that music can set your soul free. I knew instantly that I wanted to be involved in the music industry. Prior to the advent of punk in 1976, music was a cartel that was controlled by the big boys, but Punk rock changed all that. The Buzzcocks set up their own record label, New Hormones to put out their first EP. Mark Perry created the 'Punk Fanzine' creating Sniffin Glue with a photocopier and a bit of imagination. His call to arms was to print three chords on the front cover with an invocation "Now go form a band".

That was exactly what I did. It took a year to get  a guitar, learn three chords and find a few people to play in the band. There were false starts. There were tears. Our first drummer was ambushed whilst waiting for the 221 bus with his girlfriend on Mill Hill Broadway, thrown through the window of WH Smiths, severing a tendon in his arm and ending his drumming career and aborting our debut gig, a support slot with the UK Subs in Derby. Did we give up? No of course we didn't. The main problem we initially had was finding a rehersal space. I was lucky, my Dad was in the motor trade and where his yard was there was a derelict caretakers cottage, that we agreed to rent for £5 a week. I put together a musicians collective, pooling gear and sharing costs. What is now Mill Hill Music Complex was born. 

Between the start in 1979 and 2008, every year we saw our turnover grow. In 2008, we undertook a massive rebuilding project. That meant we lost two studios, our shop and our toilets, that were replaced with portaloos. Between 2008 and 2012 we lost 40% of our business and the project ended up costing twice what we budgeted. Having said that, we got something that was twice as good as we thought we would. It took us three years to get back to where we were in 2008. The portaloo's had scared off a lot of customers and the business had changed since we devised the project. But having adapted and learned, we saw amazing growth between 2015 and 2019, so much so that in 2019, we reached the point where we started a new project to develop more purpose built modern studios, in conjunction with some amazing partners. A financing blip put this on hold in December 2019. This seemed like a disaster at the time, but was a Godsend in reality. It meant that when the pandemic hit in March 2020, we were not in the middle of a building project and we had cash reserves earmarked for the build that we could divert to keeping the business running. 

In March 2020, I did not anticipate that we'd still be in lockdown a year later. Here we are in May. Many of our customers have their first bookings for over a year. I am pleased to report that they are getting work. This month Leee John and Kenny Thomas are playing the Boisdale, Zeeteah Massiah is playing the Crazy Coqs, punk legends Menace have a gig in Gateshead and Hollie Jervais has a gig at a Norfolk holiday camp to name a few. In terms of bookings, we are at about a third of what we were in May 2019. 

You may think that this is a recipe for despair and throwing in the towel? When I look at the industry, there are far more questions than answers. From what I can work out, around 30% of the studios in London and the South East have closed. Whereas around 15% of our business in 2019 was pro musicians, I'd estimate that we are seeing the equivalent of a doubling of this. We are inundated with pro musicians who's regular studios have closed. Many tell us that they'd have used us years ago if they'd known about us. We are only just starting to see the return of the social bands. It is far too early to tell how many will return. What I have noticed is the sheer re-energisation of the musicans turning up. I have an unshakeable view that whatever the post covid world looks like, music will play a massive part of it. Venues will want to attract people back and punters want to enjoy themselves. People who have been in work have had nothing to spend money on. They can't go abroad, so will want to have fun closer to home. It is hard to plan as we labour under the shadow of new variants, but as the UK death rate has plummeted, people do want to come out to play.

For me, the various Whatsapp groups etc that I have for social groups are all pinging with invites to gigs, drinks, etc. I strongly believe that our studios have gained market share by investing in ventilation last year and being able to remain open for professional musicians. As musicians are, by nature, networkers, we have broken into networks that we'd not have got a sniff of before. We all got out fingers burned last year, but I think that the world will once again see a 'roaring twenties' as we emerge from the dark days and start enjoying ourselves. Of course, we could be back to square one by this time next month, but if we are not. I strongly believe that the industry will come strongly out of the crisis. 

This last year has stretched us as a business almost to breaking point. As a sane, rational businessman, I put a plan together to wind up the business. I set up a spreadsheet of income vs expenses, which would tell me when the cash was going to run out and we'd have to wind it up. This week, we will break even for the first time since March 2020 on our day to day income/expenses. This means that doomsday will move a week into the future. Our working assumption previously that we needed six weeks money in the bank to tide us through a crisis. The fact we've survived 14 months is a miracle. I am not entirely sure how we willmanage our finances going forward, but we will most surely be a lot more conservative with respect to our reserves than we've been previously. 

Many people have left the industry. All of the freelance technicians have been thrown to the wolves by the failure to address a fair furlough scheme. As many have mortgages to pay, I am not sure that they'll leap back. But those who do will be in demand and able to command premium rates. It will be a difficult decision for many, but I am sure that once it is clear that touring etc is resuming, the lure of decent wages will win out over minimum wage stability. 

I am struck by the new found optimism in the industry this week. People are genuinely excited to be gigging again. Today I've taken bookings for major bands into October. People are talking about Xmas gigs. Normally that would be normal, but it seems to be like the promised land. The problems of normality are starting to return. Reception usually has one person answering the phone and one assisting the bands. I've been doing both on my own. It is starting to get too busy. The question is now timing, when do we bring people back from Furlough. The answer has to be when the business can afford it. I hope that day is coming very soon. We should have some idea by the end of June. 

As a musician, I found lockdown to be a sterile time. However, I've started writing some new material and have a new project on the go. For the first time in a long time I am genuinely excited about it. So what advice could I give other businesses? I am not sure I can. We were lucky with our finances having a war chest ready for a new building. I just think that someone up there is watching my back. I've always been of the opinion that those who are successful in business are those that are born lucky and prepared to work hard. I've worked 60 hour weeks since we reopened last May. I haven't earned a penny in that time, save for enough to pay my self assessment (somehow tax doesn't go away). The studio bills have had to be paid. But if you are going to be skint, the best time is when the pubs are shut and you can't go on holiday. 

1 comment:

Red Letter Day Fan club said...

Mark - Wonderful article. Once you get rock'n'roll in your blood (or in my case Ska!) it is just not leaving. We seem to be peers. I am originally from Colindale and I went to Moat Mount between 76-81. Apex corner/Mill Hill B'way always was a bit of a battle with all those roving youth cultures. Keep the faith and this wonderful service you are providing. Pete.